GBPUSD has lifted to 1.3636 during the European morning, but remains within yesterday’s range and has tested the key 1.3600 level. The rise in yields has fizzled out for now and with Treasuries outperforming versus core European markets, the Dollar has struggled during the European AM. The fact that UK PM Johnson managed to cling on despite the heated debate over “partygate” and calls for his resignation may have helped Sterling somewhat this morning, but while there still seems to be attempts to get sufficient support for a no confidence vote, for now the Pound is finding support and has also lifted against EUR and Yen. There were more new revelations this morning from Conservative MP William Wragg, accusing government whips and No. 10 of blackmail and breaking ministerial code, who says they’ve threatened to withdraw investment from MPs’ constituencies if they support the no confidence vote.
Technically, on the daily timeframe Cable rallied to and rejected the 200-day moving average at 1.3750 last week and has tested below the key psychological 1.3600 this week. This is the first of the Fibonacci levels, next sits at 1.3525, 1.3460 and the important 61.8 level at 1.3400. To move higher, the 1.3600 level needs to hold and a breach and break of 1.3750 needs to happen. Today, the 200-hr moving average sits at 1.3640, the 20-hr moving average sits at 1.3620. Support below the key 1.3600 is yesterday’s low at 1.3585 and Tuesday’s low at 1.3570.